26 December 2013

It's not swings and roundabouts

More people believe they would be helped than harmed by a rise in interest rates, according to a new survey.

A leading pollster said the finding suggested that a pre-election rate hike could actually improve David Cameron's chances of staying in Downing Street, rather than damaging them, as is widely thought.

Some 31 per cent of those questioned by YouGov for The Times said that a rise in interest rates would leave them personally better-off, against 23 per cent who said they would be better off with lower rates and 32 per cent who thought it would make little difference either way.

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A rise in interest rates would hit mortgage-holders, making it more difficult for home-owners to pay back loans. But it would be good for savers, particularly pensioners who have suffered from poor rates of return on their nest-eggs over the period since the crash of 2008.

I can readily believe that the banks would hike mortgage rates in an instant. I am a lot more sanguine, however, about the proposition that interest rates for savers would go up as quickly